Berlyn Media (Simon Berlyn), Mat Hayward/Getty Images
Scott Disick has flipped again. Kourtney Kardashian‘s ex-partner recently sold a remodeled Hidden Hills, CA, home for $5.6 million.
The aspiring home flipper had his own short-lived reality show on the E! network titled “Flip It Like Disick.”
For this project, he focused on a home in the guard-gated community where many of his famous castmates from “Keeping Up With the Kardashians” reside. The remodeled contemporary is also located down the street from Miley Cyrus’ new digs.
So did Disick pull off a profitable project? We took a deeper look.
Disick purchased the property in 2018 for $3,235,000. He then set out to transform the dated home, which was built in 1973, in a more appealing, modern farmhouse style.
The 5,663-square-foot layout was completely transformed. The resulting five-bedroom, 5.5-bathroom abode features Disick’s signature touches.
Done by Disick
The ho-hum traditional was redone “with amazing attention to detail, high-quality finishes, with an emphasis on indoor-outdoor luxury living,” the listing description notes. Even the exterior looks completely different from when Disick bought it just two years ago.
realtor.com
Berlyn Media (Simon Berlyn)
Berlyn Media (Simon Berlyn)
Berlyn Media (Simon Berlyn)
Berlyn Media (Simon Berlyn)
Berlyn Media (Simon Berlyn)
Berlyn Media (Simon Berlyn)
Guests enter through a huge, 10-foot glass pivot door into an open layout, which looks straight out through Fleetwood pocket doors to the backyard.
The living area features vaulted ceilings with exposed beams, and the open kitchen includes white-oak cabinetry, Miele appliances, and a massive center island.
Other highlights include a master bedroom downstairs with glass pocket doors that open to the backyard. A second master bedroom can be found upstairs.
Other luxe details include white-oak doors with invisible hinges, a recessed TV over the family room fireplace, and an automated home system with surround sound throughout the home, as well as in the outside pavilion.
Set on over an acre of flat land, the upscale design continues to the backyard, with a zero-edge pool and spa, gas fire pit, and a reclaimed-wood pavilion.
By the numbers
While the end result is an impressive luxury residence, Disick clearly wanted to double his money. That desire came up short. The freshly renovated residence appeared on the market in September 2019 for $6.89 million—a little over double what he paid for the place 17 months earlier.
But with no buyers biting, the price dropped to $6.49 million in early 2020, and then $6.25 million, before landing at $5.9 million in July. That finally captured the attention of an interested party, who secured the property for $5.6 million. The final sale price represents a 18.7% discount on Disick’s initial asking price.
Does it add up?
So after two years, a renovation, and multiple price cuts, did Disick successfully flip? Or did he flop?
While we aren’t privy to the numbers involved in the entire project, we consulted with a couple of experts on what they look for in a solid investment.
“Assume a remodel budget of $150 per square foot. With the house being about 5,000 square feet, we have an interior remodeling budget of $750,000,” says Colby Hager, owner of Capstone Homebuyers, which buys and sells renovated homes in Texas.
His numbers are based on the listing photos, which showcase a high-end remodel. Factoring in the pool and landscaping, Hager rounded up his total estimate to $1 million.
“So knowing the purchase price, and having a reasonable understanding of where the primary costs should fall, we can guess that Scott spent anywhere from $4,685,000 to $5,020,000 to purchase, renovate, and sell the property,” he says.
At a sales price of $5.6 million, that would leave a profit of somewhere under seven figures, nowhere near Disick’s goal of doubling his investment.
In the most generous estimation, the reality TV star is likely to have cleared around a 20% to 25% profit, when all was said and done.
A golden ratio for remodeling
“The most popular rule of thumb used by rehabbers is the 70% rule,” says Bill Samuel, a residential real estate developer specializing in rehabbing houses to rent and sell in the Chicago area.
The rule Samuel cites breaks down like this: Multiply your final sale price by 70%. Then subtract what you spent to purchase the property. The remainder represents the maximum a flipper should pay for a home’s makeover.
In Disick’s case, the breakdown looks like this: The final sale price was $5.6 million. Multiplying that by 0.70 results in $3.92 million. Subtract the home’s original purchase cost of $3,235,000 from $3.92 million, and you’re left with $685,000. That $685,000 represents the number that Samuel considers the maximum that should have been spent on a remodel.
“My guess is his rehab costs were considerably higher than $685,000, but it’s very hard to say, without getting a lot more information,” he says.
But if you look back at Disick’s initial asking price of $6.9 million and apply the 70% rule, that puts the maximum makeover costs at around $1.5 million.
And that amount spent for a high-end project is “probably more in line with what an ideal deal would look like,” Samuel notes.
“I would guess the $1.5 million construction cost is closer to the actual number than the $685,000,” he adds. “Overall, my guess is the deal finished a little thin, but still profitable at exit.”
Kozet Luciano and Andre Manoukian of The Agency represented Disick. Steve Moritz with Sotheby’s International Realty and Margie Markus with Coldwell Banker represented the buyers.
The post Did Scott Disick Pull Off a Successful Flip in Hidden Hills? We Do the Math appeared first on Real Estate News & Insights | realtor.com®.
source https://www.realtor.com/news/celebrity-real-estate/did-scott-disick-pull-off-a-successful-flip-in-hidden-hills-we-do-the-math/
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